EAA Tax Series - Fringe Benefits Tax 101

EAA Tax Series - Fringe Benefits Tax 101
Dear *|IF:NICKNAME|* *|NICKNAME|* *|ELSE:FNAME|* *|FNAME|*, If you want to provide benefits to your employees apart from their basic salary, then you should know that this is a form of a "fringe benefit" that is taxable by the government. The reason for this is that the government views the benefit as a form of income for your employee. Read on to learn how to compute for Fringe Benefits Tax. Soooo... what exactly are fringe benefits? A "fringe benefit" is any good, service, or other benefit furnished or granted by an employer, in cash or in kind, in addition to basic salaries. Examples of fringe benefits include the following : Housing Expense account Vehicles Household personnel Interest on loans at less than market rate to the extent of the difference between the market rate and actual rate granted Membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations Foreign travel expenses Holiday/Vacation Expenses Education assistance to employee and his/her dependents Life or health insurance, non-life insurance premiums or similar amounts in excess of what the law allows What is Fringe Benefits Tax? Fringe Benefits Tax is a final tax on the grossed-up monetary value of the fringe benefit being given to a managerial or supervisory employee. It is considered a final income tax on the employee. Regardless of whether the employer is an individual, partnership, or corporation, this tax applies. How do you compute for fringe benefits tax? As of January 1, 2000, the Fringe Benefits tax rate is 32% of the grossed up monetary value of the benefit. To get the Fringe Benefits tax, you first need compute for the grossed up monetary value. Here is the equation: Grossed Monetary Value (GMV) = Monetary Value/68% After you have computed for the GMV, you can now compute for the Fringe Benefits Tax. Fringe Benefits Tax = Grossed Up Monetary Value x 32% How do you evaluate the value of the Fringe Benefit if it is not in monetary form? Property If the property is transferred under the employee's name, the monetary value of the fringe benefit is based on the fair market value of the property. If the property is under the employer's name, the monetary value of the fringe benefit is equal to the depreciation value of the property. If you want to learn more about Fringe Benefits Tax, you can watch our FREE video tutorial. You can watch Sarah Songalia, the Managing Director of Entrepreneurs Accounting Academy, as she teaches you how to compute for Fringe Benefits Tax by following her through a sample computation. She will also explain how to journalize the transaction in your books.   This is just a general overview of the Fringe Benefits Tax. There are still many elements and exemptions that you need to know. If you want to learn the ins and outs of the Philippine taxation system, join us for our Comprehensive Tax Seminar on February 23, 2012. This 1-day seminar will teach everything you need to know about fringe benefits tax, value added tax, withholding tax on wages, expanded withholding tax, corporate income tax, local government taxes, and many more. Call us at (632) 576 4423 | 310 3857 | 215 4824 to learn more.   Entrepreneurs Accounting Academy info@eaa.edu.ph 1006 Rufino Plaza, 6784 Ayala Avenue Makati City Tel. no. 310.3857 | 576.4423 | 215.4824 Mobile no. 0917.854.1357 | 0918.990.7278 | 0932.888.4117 "FOLLOW" us on Twitter

Why specialized jobs like Payroll Specialist are more in demand these days?

It's surprising, but not entirely unprecedented that specialized jobs are more in demand these days. Type "specialized, in demand jobs" in any search field online and you'll be surprised with the results, which can yield positions such as "refrigerator technician", "dog trainer" and "translator/interpreter" for languages you thought were uncommonly needed for business and communication. The various job openings in fields previously not thoroughly explored are growing, which is always good news for those looking for a wider range of career options. However, this would consequently mean a more narrow and specific skill set to match the job. With the discussion of the possible "job-skill mismatch" opened last year and positioned as one of the reasons for the high unemployment rates despite the equally large number of graduates per year, could this mean that while there are more creative and innovative job postings out there now, it would still be difficult to land them without having to spend an arm and a leg on further education and training? That's where specialized training and short courses come in. In accounting, finance and human resources, for example, lie plenty of specialized jobs that might have been included in the traditional 4-year course. While there are some aspects of 4-year courses and short training courses that can't be compared and weighed against each other, the latter will cater to those seeking almost customized education and training that won't require a hefty investment in terms of both time and money. In finance and accounting, recently popular job postings include openings for bookkeepers, auditing and accounting clerks, or accounting staff adept in particular software and even tasks that overlap related fields. Type "Payroll Specialist" for example on Google or Yahoo! and see the surprising results. With payroll being one of every company's vital parts  of cost and operations, there's no room for small errors. Common mistakes such as misclassification of workers, poor record keeping and data entry and missing deadlines could put employers in hot water with government penalties and charges.  There's actually a Payroll Specialist Course being offered by Entrepreneurs Accounting Academy. This TESDA-accredited course is focused on the payroll function and applies a competency-based curriculum that ensures that all its graduates are ready to put their training to work. Included in the module are: Statutory compliance/legal requirements and aspects Tax implications Accounting and record-keeping Accurate payroll calculation Future trends and best practices Outsourcing the payroll process Roles of the payroll specialist Employer payroll obligations This comprehensive course prepares its graduates to land jobs immediately as payroll specialists, while opening opportunities for further studies in accounting, management, human relations, business and other related fields. For more exclusive information on this course, call (632) 576 4423 | 310 3857 | 215 4824 | now or email us at inquiry@eaa.edu.ph.   info@eaa.edu.ph 1006 Rufino Plaza, 6784 Ayala Avenue Makati City Tel. no. 310.3857 | 576.4423 | 215.4824 Mobile no. 0917.854.1357 | 0918.990.7278 | 0932.888.4117 "LIKE" us on Facebook or "FOLLOW" us on Twitter